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August 16, 2005
Are You Experienced? (Part 1)
Jeff posted an audio interview with Jim Gilmore earlier -- go listen to it -- but I wanted to put some thoughts down about his presentation yesterday on "The Experience Economy."
Gilmore's discussion started off with the scary-sounding phrase "Progression of Economic Value," which is actually a simple concept underlying Gilmore's message: We have gone from the industrial economy, through the service economy, and are now living in an experience economy.
People are making purchase decisions, such as joining your association, based not so much on the products you offer or the service you provide, but on the experience you provide them.
He offered this example: moms and birthday cakes.
Mom used to bake cakes from scratch. For a few cents, she purchased commodities, such as eggs and milk, and made the cake herself.
Later Mom discovered Duncan Hines, and switched from commodities to goods, costing a few dollars. It's easier to make a cake from mix, and worth a few dollars.
Of course, cakes from cake mix aren't necessarily better than homemade, and there's still some work involved. So Mom decided to purchase a service for several dollars more and buy you a nice big birthday cake from a bakery.
But there's more to a birthday than a cake. Today, Mom's just as likely to outsource the whole party to Chuck E. Cheese because it makes for a much better experience.
From a few cents to several hundred dollars ... for what is, essentially, the same thing.
Gilmore showed us a picture of something called the Gumball Wizard. It's a gumball machine, like any other, with one important difference: rather than popping out of the little metal dispenser, gumballs roll down a long loopy slide that looks like a roller coaster.
Same product as other gumball machines. Worse service (it takes longer to get the gumball out). But ain't it fun to watch the gumball loop its way down the slide?
Taking something rather ordinary (like buying a gumball, or being served a drink by a bartender) and turning it into a surprising and engaging experience is key to success in the modern world, Gilmore says. The experience itself becomes the product.
More posts later, including thoughts on green ketchup, how to hit the "Sweet Spot," and why a theme is not a tagline.
Posted by Kevin Holland at August 16, 2005 12:52 PM
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